Government Securities

The government securities are classified into Central Government securities, State Government securities, the securities guaranteed by the Central Government for all India financial institutions such as IDBI, ICICI and IFCI; the securities guaranteed by State Governments for such state institutions as State Electricity Boards and housing boards; and the treasury bills issued by the Reserve Bank of India.
The government securities are held mainly in three forms, namely:

1. Stock certificates or Inscribed stock
2. Promissory notes
3. Bearer bonds

The government securities are issued in denominations of Rs. 100. The interest is payable half- yearly. These securities can again be classified on the basis of their duration as; long-dated, medium-dated and short-dated. The long-dated securities have maturities exceeding 10 years, the medium-dated securities have between 5 and 10 years and the short-dated securities mature within 5 years.